Hindoostan Spinning & Weaving ... vs Sharad G. Khanolkar And Ors.
2001 Latest Caselaw 959 Bom

JUDGMENT

Nishita Mhatre, J.

1. These two Writ Petitions arise out of a common order passed by the Industrial Court declaring that an unfair labour practice had been committed under Item 9 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as "MRTU AND PULP Act").

2. Writ Petition 1603 of 1999 has been filed by ECK Haubold and Laxmi Ltd. (hereinafter referred to as "ECK Haubold"), which is an undertaking covered by the Industrial Disputes Act, 1947 manufacturing Calendar Bowls required for the textile mills. Respondent Nos. 1 to 5 in this petition are workmen, who claim to be employees of ECK Haubold. Respondent No. 6 is Hindustan Spg. and Wvg. Mills Ltd. which is a textile mill governed by the Bombay Industrial Relations Act (hereinafter referred to as "BIR Act").

Writ Petition No. 1079 of 1999 has been filed by Hindustan Mills against the same workmen who are involved in the other petition. Respondent No. 6 in this petition is ECK Haubold. As the issue involved in these petitions is common, these petitions are being decided and disposed of together.

3. A few facts giving rise to these petitions are as under :--

ECK Haubold and Hindustan Spg. and Wvg. Mills Ltd. entered into agreements from time to time under which Hindoostan Mills let out for a period of five years part of its mill premises to ECK Haubold for the purpose of installing and working its plant and machinery for the manufacture of Calendar bowls and for the purpose of storage of any finished bowls or any other like or incidental purpose. Such agreements were entered into between the parties right from 1959. One such agreement of 17th April, 1996 is annexed to the petition. Under the agreement, ECK Haubold granted a licence to Hindoostan Mills to operate the plant for the purpose of manufacturing or refilling cotton, paper, jute and wool bowls, for and on behalf of ECK Haubold. It was further agreed that the property and the plant would continue to always remain in ECK Haubold and the ownership or domination of ECK Haubold over the plant would not be prejudicially affected. Steel and other raw materials for the manufacture or refilling of these bowls were to be supplied by ECK Haubold to Hindoostan Mills by importing the same. In the event, raw materials were not supplied by ECK Haubold, Hindoostan Mills was required to buy these materials on account of and as agents for ECK Haubold. Under Clause 5 of the agreement, ECK Haubold placed the services of technicians engaged by them at the disposal of Hindoostan Mills for working in the Calendar Bowl Department. In turn, Hindoostan Mills was to supply for and on behalf of ECK Haubold all necessary water, electricity and other services required for the purpose of manufacture and refilling of cotton, paper, jute or steel goods. Hindoostan Mills was also required to supply for and on behalf of ECK Haubold local workmen skilled and unskilled and other employees required for the aforesaid purposes. Hindoostan Mills was also required to pay the salaries, wages and other emoluments of workmen in the first instance for which they were to be reimbursed by ECK Haubold.

The agreement also stipulated that the mill was required to render statement of expenses to ECK Haubold within a month of incurring such expenses. All manufactured bowls were required to be handed over to ECK Haubold by Hindoostan Mills and until delivery of the same was taken by the buyer, these bowls were to be kept in the plant which was let out to ECK Haubold and the property in these bowls would remain with ECK Haubold. For this service, ECK Haubold was to pay a sum of Rs. 3,000/- by way of rent for the premises and a sum of Rs. 1,000/- for the services provided by Hindoostan Mills. The plant was required to be kept in working condition by Hindoostan Mills were deemed as occupiers of the factory for all statutory purposes. Either party to this agreement had the liberty to terminate the same by giving at least 6 months' notice to the other side.

4. It appears that the relationship between Hindoostan Mills and ECK Haubold and the workmen including the respondents in these petitions continued smoothly for a long period of time. In the year 1991, the employees of the ECK Haubold department had filed an application under MRTU and PULP Act for recognition under the said Act which is still pending before the Industrial Court. Some workmen, including the workmen in the present petition filed affidavits in the recognition application through the union, to the effect that they are employees of Hindoosthan Mills.

5. In 1997, when there was no work available in the Calendar Bowl department, Hindoostan Mills issued transfer orders to the employees transferring them to various departments of the Mill. These transfer orders were challenged by the respondent-workmen on the ground that Hindoostan Mills had no authority to issue such transfer orders as they were in fact employees of ECK Haubold. A complaint was also filed by some employees including one who is Respondent No. 5 in Writ Petition No. 1603 of 1999 challenging the suspension order and chargesheets issued to the workmen on various dates in 1992-1993. These complaints were filed before the Industrial Court under Item 9 of Schedule IV of MRTU and PULP Act. The workmen also claimed interim reliefs.

6. The complaints were opposed by both ECK Haubold as well as Hindoostan Mills, by raising the contentions, inter alia, that the workmen were in fact employees of Hindoostan Mills and not ECK Haubold; that there was no privity of contract between ECK Haubold and the workmen; that there was an agreement between ECK Haubold and Hindoostan Mills that Hindoostan Mills would provide labour for the plant of ECK Haubold in the premises; that by no stretch of imagination, these employees could be considered as workmen of ECK Haubold when they have been issued several memos, warnings and chargesheets by Hindoostan Mills. They also contended that the complaint under MRTU and PULP Act is not maintainable as there was no employer-employee relationship between ECK Haubold and the employees working in the Calendar Bowl Department. Hindoostan Mills raised the contention that the Calendar Bowl department was just one of the many departments of the Mills and, therefore, the workmen employed in this department were their own employees and ECK Haubold had no relationship with the employees. The Hindoostan Mills also filed the agreement dated 28-3-1996, along with their reply, which was the last agreement entered into between them and ECK Haubold regarding the running of the latter's plant in the premises of the Hindoostan Mills. The Mills also contended in its written statement that ECK Haubold was in no way concerned with the service conditions of the employees working in the Calendar Bowl Department of the Hindoostan Mills and, therefore, the question of ECK Haubold being the employer of these workmen did not arise. ECK Haubold adopted the same contentions in their written statement filed by them before the Industrial Court.

7. Documentary evidence was produced before the Industrial Court to establish the true employer of the workmen. These documents included attendance card etc. The Mills also produced on record agreements entered into between themselves and Rashtriya Mill Mazdoor Sangh (RMMS) which is the representative Union of workers working in the textile industry in Bombay. Hindoostan Mills also took up the plea that the workmen were estopped from contending that the Mill was not the employer but ECK Haubold was the employer in view of the fact that in the recognition application, the workmen including the respondents except respondent No. 5 in Writ Petition No. 1603 of 1999 had filed affidavit to the effect that they are employees of the Mill and not of ECK Haubold. Oral Evidence of the workmen as well as the representatives of Mill was led. No witness was examined on behalf of ECK Haubold.

8. By an order dated 29-1-1999, the Industrial Court held that ECK Haubold and Hindoostan Mills have committed unfair Labour practice under Item 3 of Schedule IV and restrained them from continuing to engage in the unfair Labour practice. However, the complaints in respect of Items 9 and 10 of Schedule IV and Item 4(c) and (f) of Schedule II of the Act were rejected. The Industrial Court directed the ECK Haubold and Hindoostan Mills to withdraw their transfer orders issued to the workmen. The Industrial Court was of the opinion that the agreements entered into between the ECK Haubold and Hindoostan Mills which were produced on record demonstrate that it was an agency agreement and that Hindoostan Mills was merely an agent of the ECK Haubold. The Industrial Court was of the view that as agents, Hindoostan Mills could take disciplinary action against the workmen employed by them for and on behalf of the ECK Haubold and, therefore, rejected the complaint filed by one of the workmen challenging his suspension and chargesheets. However, as regards the complaint regarding transfer of workmen from Calendar Bowl department of Hindoostan Mills to other departments, there were two different employers according to the Industrial Court and no workmen could be transferred to work in another establishment. The Industrial Court also came to the conclusion that in no event could it be considered that the Calendar Bowl Department was a department of the Hindoostan Mills and held that this department was itself ECK Haubold and the employees working in the said department were workmen of ECK Haubold.

9. The first question which arises in these petitions is whether the Industrial Court had the jurisdiction to entertain such a complaint in view of recent judgments of the Apex Court in the cases of Vividh Kamgar Sabha v. Kalyani Steels, Ltd. and Anr., reported in 2001 I CLR 532, Cipla Ltd. v. Maharashtra General Kamgar Union reported in 2001 I CLR 754, judgment of this Court in the case of Hindustan Coca-Cola Bottling S/w Pvt. Ltd. v. Bhartiya Kamgar Sena and Ors. (Appeal No. 782 of 2001 in Writ Petition No. 927 of 2001 since reported in 2002(1) Mh.LJ. 559). The contention raised on behalf of both the employers is that it could not be said that these workmen were undisputedly or indisputably workmen of ECK Haubold and, therefore, the complaint under MRTU and PULP Act was not maintainable. The submission on behalf of the employer is that on the basis of a bare reading of the complaint, one could not draw the conclusion that the employer was ECK Haubold and not Hindoostan Mills and therefore, the complaint was not maintainable. Strong reliance is placed on the judgments cited above and it is urged that the complaint itself deserves to be dismissed.

10. On the other hand, the learned counsel for the respondent-workmen contends that the pleadings before the Industrial Court demonstrate that the ECK Haubold is indisputably the employer of the workmen. The contention is that a bare reading of the complaint would not suffice in order to come to the conclusion whether the question was undisputed or indisputable and it was only after the written statement is considered that such an inference could be drawn. The learned Counsel for the employers submitted that in the case of Hindustan Coca-cola (supra), the Division Bench of this Court has considered it necessary to read the complaint in order to decide as to who the employer is. A perusal of the complaint should demonstrate as to who the employer is urges the learned Counsel.

11. Mrs. Patankar, learned counsel for the Hindoostan Mills, urges that the question as to whether the Industrial Court has jurisdiction can be decided only on the basis of the plaintiffs case and not on the case of the defence. She placed reliance on the judgments in the cases of A.K. Bochare v. Nagpur District Central Co-op. Bank Ltd. reported in 1993 // CLR 1076. Abdulla Bin Ali and Ors., v. Galappa and Ors., , Northcote Nursing Home Pvt. Ltd. and Ors. v. Zarine H. Rahina and Ors. reported in 2001 II CLR 155. She submits that the complaint itself shows that the workmen had raised the controversy or dispute regarding the true employer and the complaint did not in any manner categorically disclose as to who the actual employer was. She submits that this being the case, the Industrial Court ought to have at the threshold itself dismissed the complaint as not being maintainable in the light of the Judgments of the Apex Court in Vividh Karngar, Cipla (supra) and the judgment of this Court in the case of Hindustan Coca-cola (supra).

12. Contrary to this Mr. Pai, learned Counsel for workmen submits that the agreement which has been produced by the employer along with their pleadings is an agency agreement, a bare perusal of which would show that ECK Haubold is the employer and Hindoostan Mills is barely an agent. He submits that the case of Cipla Ltd. (supra), therefore, does not apply to the facts of the present case. He submits that neither of the cases would apply to the facts of the present case and urges that the complaint is maintainable and would have to be considered on merits. He also submits that the burden of proof would lie on the employers to show that the workmen were not his workmen as held by the Apex Court in the case of Atoysius Nunes v. Thomas Cook India Ltd. reported in 2000 II LLJ 146. He further submits that different agreements entered into by RMMS and Hindoostan Mills for different departments did not in any way demonstrate that the Calendar Bowl department was a department of Hindoostan Spg. and Wvg. Mills. He submits that this department of Calendar Bowl was being run as a plant of ECK Haubold by Hindoostan Mills for and on behalf of ECK Haubold. He submits that at the most, the Mills have the power to transfer the workmen employed in Calendar Bowl department to another department of ECK Haubold but not to any department of the Mill. He further submits assuming that the Calendar Bowl department is part of Hindoostan Mills, they ought to have sought permission under Section 25-O of the Industrial Disputes Act prior to closing down the department. He further submits that if this amounts to shifting of the undertaking of ECK Haubold run as a Calendar Bowl Department, the workmen were entitled to be transferred to the place where the Calendar Bowl department was shifted. He further submits that in view of the judgment of the Apex Court in the cases of Kundan Sugar Mills v. Ziya Uddin and Ors. reported in 1960 I LLJ 666, Jawaharlal Nehru University v. K. S. Jawatkar and Ors. reported in 1989 H CLR 15, the Mills had no authority whatsoever to transfer them to any other establishment but ECK Haubold.

13. After considering the judgments in the case of Vividh Kamgar (supra), Cipla Ltd. (supra) and the case of Hindustan Coca-cola (supra) of this Court, I am of the view that the complaint is maintainable. The Apex Court has held that the relationship of employer-employee must be "undisputed or indisputable" before a Complaint is maintainable. The Complainants in a Complaint would know if the relationship is undisputed only when the employer filed a written statement and disputes the relationship. It would then be open to the Complainants to demonstrate that the relationship was never disputed earlier or that it is indisputable based on the pleadings before the Industrial Court. These pleadings would include any annexures to the Complaint and the written statement. The Hindoostan Mills in this case have annexed the agency agreement which has to be considered before the jurisdiction of the Industrial Court can be ousted. The agreement which the petitioner has annexed to the written statement shows that Hindoostan Mills was acting as an agent of the ECK Haubold. The agreement shows that the Mills had given part of its land for the use of ECK Haubold to install its plant and machinery. This establishment was then to be run by the Mills on behalf of the ECK Haubold by engaging workers for that purpose. On each occasion, there has been clear understanding that the ECK Haubold would reimburse the Mills as far as salaries, wages and other legal dues of the workmen were concerned. The expiry of the agreement does not affect the continued use and occupation of the premises let to ECK Haubold so long as the rent is being paid. The production of the cotton, paper, jute and wool bowls was to be handed over to ECK Haubold by the Mills and until delivery of the same, it was to be kept in the plant leased out to ECK Haubold. The property in these Bowls was to remain with ECK Haubold. It is not as if under the agreement a lumpsum amount was paid to Hindoostan Mills for running the establishment with the help of the workers. The agreement categorically states that the salaries, wages and all other emoluments of workmen skilled and unskilled would be reimbursed by ECK Haubold to Hindoostan Mills. Technicians were to be supplied by the ECK Haubold for running the plant. In fact, the agreement specifies that the property in the plant will continue to remain with ECK Haubold and nothing would prejudice or affect the ownership or domination of ECK Haubold over the plant. Hindoostan Mills is named as the occupier and not owner of the factory for the purpose of meeting certain statutory obligations. It therefore, means that Hindoostan Mills was merely an agent and could not be considered as the actual employer of the workers working in the Calendar Department.

14. The contention of the learned counsel for the petitioners that in view of the latest judgments cited hereinabove, the complaint would have to be rejected, cannot be accepted as once the pleadings are filed before the Industrial Court, the Industrial Court has to check whether the relationship between the employer and employee is undisputed or indisputable. In the instant case, the respondents have all along claimed that they are workmen of ECK Haubold and not of Hindustan Mills. Hindoostan Mills had by their written statement brought on record the agreement between them which is an agency agreement. They also brought on record the agreements, affidavit filed by the workmen in the MRTU and PULP application pending for recognition wherein the issue as to whether the workmen were employees of ECK Haubold or not is to be decided. However, in my view, these documents do not in any way undermine the fact that the petitioner Hindoostan Mills was merely an agent of ECK Haubold. The fact that it entered into agreements with the RMMS which, besides covering the service conditions of workmen of Hindoostan Mills also gave benefits to the workmen of the Calendar Bowl Department, does not, in my view, indicate that there was any relationship of master and servant between the employees of the Calendar Bowl department and Hindoostan Mills. The documents annexed to the written statement do not show that the workmen were members of RMMS. The mere fact that the disciplinary action has been taken against some of the workmen by the Mills is of no consequence, as they have done so on behalf of ECK Haubold. Therefore, in my view, the complaint is maintainable.

15. The Industrial Court, on the basis of the evidence led before it, has come to the conclusion that the transfer of the respondents is illegal and mala fide. The Industrial Court has also determined the fact that the petitioner in writ petition No. 1079 of 1995, that is, Hindoostan Mills chargesheeted one of the workmen is of no consequence. I see no reason to interfere with these findings of the Industrial Court. If in the instant case, Hindoostan Mills had transferred the employees working in the Calendar Bowl Department to any department of ECK Haubold, the workmen could have had no grievance. In the instant case, the Mills transferred the workmen from one employer to another employer and this cannot be done without the consent of the workmen. In my view, the order of the Industrial Court is well reasoned and requires to be upheld. In view of this, both the writ petitions are dismissed. No order as to costs.

16-17. This order is stayed for a period of 8 weeks from today on the oral application of Mr. Sawant, learned Advocate for the petitioner.

18. Issuance of certified copy of this order is expedited.

19. Parties to act on an ordinary copy of this order duly authenticated by the Court Associate.